European shares extend gains on U.S. growth outlook
LONDON, July 9 (Reuters) - European shares rose on Tuesday in a broad-based rally, extending their gains into a second session on optimism about the health of the U.S. economy that was underpinned by a solid start to the earnings season there.
The FTSEurofirst 300 was up 0.5 percent at 1,185.79 by 0708 GMT, having firmed 1.4 percent on Monday, after Alcoa , the largest U.S. aluminum producer, unveiled a larger-than-expected adjusted second-quarter profit.
The corporate news followed recent strong jobs data.
But traders noted that while Alcoa's robust earnings were acting as a short-term positive, they could add weight to the view that the U.S. Federal Reserve would soon start to scale back its equity supportive quantitative easing (QE) programme.
"The start of the Q2 earnings season in the U.S. is boosting sentiment," Mark Ward, head of trading at Sanlam Securities, said.
"However, corporate earnings news that is too good may spark caution amongst shareholders as a recovering economy will likely increase the chance of a speedier tapering of the Fed's QE programme."
Among the leading European gainers was French firm EDF , up 6.8 percent after it announced plans to raise prices.